Activision Blizzard Case
Activision Blizzard CaseJames Higgins
1. Activision Blizzard is a video game publisher. It is one of the largest third party video game publishers in the world. One of today’s most popular games, Call of Duty, was created and produced by Activision Blizzard. It is said to be the only publisher that has leading market positions across all categories. Activision is the worlds second largest gaming company behind Nintendo.
Best Buy is a consumer electronics distributor. It is one of the largest electronics distributors in the world. Best Buy accounts for 19 percent of the consumer electronic market in the United States. Best Buy announced they are closing 50 stores around the country this year.
Activision’s Beta over 9 years is 0.797853835
Activision’s Beta over 5 year is 0.603021178
Activision’s Beta over 3 year is 0.393789458
Best Buy’s Beta over 9 year is 1.338458503
Best Buy’s Beta over 5 year is 1.234938399
Best Buy’s Beta over 3 year i1.01586673
b. Google finance has Best Buy’s beta at 1.30 and Google finance has Activision blizzard’s beta at .54
Yahoo finance has Best Buy’s beta at 1.48, and Yahoo finance has Activision Blizzards Beta at .79
Neither of these sites told us how they came across these betas.
c. With a significance level of 5% we fail to reject that alpha is not zero. The T statistic we got was -0.650050239 and it is not greater than 1.96.
i. The geometric average return for the value line is 6.0259%. I got this percentage by adding one to each number in the value line column, then finding the product of all of them. Then raising it to ^(1/22.5) and finally subtracting one.
nificance level of 5% we fail to reject alpha is not zero. The t-statistic that we got was 1.24 which is not greater than 1.96.